Hawk Inc. has 250,000 common shares outstanding. Earnings from continuing operations amounted to $2,359,000 (after tax) for the year ended 31 December 20X2. Hawks Incs income tax rate is 30%. The company had no discontinued operations. The market price of the companys common shares was $18.

Hawk had these additional components in its capital structure at the end of the year:

• 28,000 cumulative preferred shares outstanding. Each share is entitled to an annual dividend of $12 per share and is convertible into 5 common shares.
• 6% debentures amounting to carrying value of $470,000 were issued on 1 January 20X2. The debentures are convertible into 20 shares per $1,000. Interest is payable annually.
• Outstanding options permitting the holder to buy 25,000 common shares for $20 per share.

Required:

Calculate basic and diluted earnings per share.

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